Update on the Ashland Facility
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Article 7 under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
26 January 2024
Active Energy Group Plc
("Active Energy" or the "Company")
Update on the Ashland Facility
Active Energy (AIM: AEG, OTCQB: ATGVF), the international biomass based renewable energy business, is today updating shareholders on the status of future production at the CoalSwitch® fuel reference plant being constructed at Ashland, Maine (the "Ashland Facility") by Player Design, Inc. and its associates ("PDI").
Since the Company's announcement on 20 November 2023, Active Energy has been in discussions with PDI and its associates in an effort to understand and resolve construction issues announced on that date and to secure commitments from PDI delivery dates of CoalSwitch® fuel. The Company's announcement of 20 November 2023 followed a series of delays at the Ashland Facility which the Company has previously disclosed and are summarized in the Appendix to this announcement.
To date these discussions have proven to be unproductive and PDI has now informed Active Energy that PDI is no longer willing or able to commit to either: i) a future production date for CoalSwitch® fuel; or ii) future production volumes of CoalSwitch® fuel. This recent development is hugely disappointing for Active Energy, who have several potential customers lined up to receive CoalSwitch® fuel at the earliest opportunity.
The Company retains ownership of some of the production equipment and components being used in the construction of the Ashland Facility. The book value of this equipment currently situated at Ashland was, as of 30 June 2023, valued at $1.5m. Additionally, Active Energy has contributed the cash sum of $1.1m towards the development of the Ashland Facility and prepaid PDI a further $300,000 for future services. The Board is now seeking the immediate return of these cash balances and has retained legal counsel in the United States to investigate and advise in regard to all of Active Energy's rights and remedies.
Throughout 2023, Active Energy has been actively marketing CoalSwitch® fuel to a range of potential customers, including companies operating in the pulp and paper, cement, and power generation industries. These conversations have reinforced the Board's view that there is significant market appetite for CoalSwitch® fuel. Notwithstanding the production delays and the failure of PDI to produce CoalSwitch® fuel at the Ashland Facility, this customer interest remains, and the Board is now looking for the most expedient way to commence CoalSwitch® fuel production, using its proprietary technology in North America or Southeast Asia. Since the announcements in the Interim Results in September 2023, Active Energy has focused on improvements to both CoalSwitch® fuel and the production processes. The Company had announced, at that time, a working partnership with Omega Thermal Solutions Group LLC, based in the US, to develop a new manufacturing process and create variants of CoalSwitch® fuel focusing on a torrefaction production process. The improved performance metrics, such as higher fixed carbon content allows these biocarbon fuels to participate in the growth markets such as soil amendments, air filtration, ferro silicon and the metallurgical steel industries. This product development, assisted by the recently appointed US management team is opening new revenue opportunities. Once the Company has received the monies it is owed by PDI, it will have sufficient cash resources to progress the next stage of its strategy.
Michael Rowan, CEO of Active Energy, commented:
"The actions of PDI are as surprising as they are disappointing after a long journey toward the production of CoalSwitch® fuel, especially given the fact that Tyler Player is a shareholder of Active Energy. The Board is taking swift and decisive action in the interests of our shareholders to minimize the impact, and to actively investigate and pursue all available claims arising from Active Energy's dealings with PDI over the last 3 years. Shareholders should be rest assured that we are taking all the necessary steps to protect Active Energy's current and prospective interests.
"Based on the continuing strong product interest from potential customers, the Board is confident in the significant future commercial opportunities for CoalSwitch® fuel, notably both in North America and Vietnam, and is encouraged by the ongoing discussions and evaluations currently being undertaken by several alternate commercial production partners. The shareholders will be updated with these developments at the earliest opportunity."
Enquiries:
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Active Energy Group Plc |
Michael Rowan (Chief Executive Officer) James Leahy (Non Executive Chairman) |
info@aegplc.com |
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Allenby Capital Limited Nominated Adviser and Broker |
Nick Naylor/James Reeve/Daniel Dearden-Williams (Corporate Finance) Amrit Nahal (Sales/Corporate Broking) |
Office: +44 (0)20 3328 5656 |
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Camarco Financial PR Adviser |
Tom Huddart / Emily Hall / Lily Pettifar |
aeg@camarco.co.uk Office: +44 (0)20 3757 4980 |
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Scoville PR US PR Adviser |
John Williams |
jwilliams@scovillepr.com |
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Website |
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www.aegplc.com |
www.linkedin.com/company/activeenergy
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@aegplc |
About Active Energy Group
Headquartered in London with operations in the United States, Active Energy Group plc (AIM: AEG, OTCQB: ATGVF) is an international biomass-based renewable energy company focused on the production and development of next generation biomass and biocarbon products that have the potential to transform coal fired power and heavy industries and the existing renewable biomass industry.
Active Energy has developed a proprietary technology which transforms waste biomass material into high-value renewable fuels. Its patented product CoalSwitch® is a leading drop-in biomass renewable fuel that can be blended and co-fired with coal at any ratio without requiring significant plant modification or wholly replacing existing biomass fuels.
Appendix
Chronology of Development updates supplied to the Company by PDI
Since July 2022, PDI has missed a series of production deadlines for the delivery of CoalSwitch® fuel to Active Energy.
· In July 2022, PDI assumed the role of production partner for CoalSwitch® fuel and agreed first production volumes would commence at the Ashland Facility during the first quarter of 2023.
· In January 2023, the Board was informed by the CEO of PDI that construction would be completed before the end of Q1 2023, and first production volumes would commence early in Q2 2023.
· In March 2023, PDI confirmed that initial production volumes were targeted at an annualised rate of 35,000 tons per annum, but delays in the issuance of relevant construction and air permits for the Ashland Facility created consequential construction delays toward the end of Q2 2023.
· In May 2023, the Company announced that it had now been informed by the CEO of PDI that the Ashland Facility could only be completed in Q3 2023 owing to continuing construction and component delivery delays.
· In September 2023, Active Energy announced that PDI was continuing to have component and construction issues at the Ashland Facility but nonetheless, the CEO of PDI believed that production of CoalSwitch® fuel could commence in late November 2023.
· In November 2023, the CEO of PDI informed AEG that the Ashland Facility could only commence operations by the end of Q4 2023 at the earliest and that production of fuel volumes for customer delivery would only commence in Q1 2024. On 20 November 2023, the Company announced that it had been informed by PDI that there were continuing construction and engineering delays at the Ashland Facility, and, as a result, the Board of Active Energy had concluded that it no longer had confidence in any of the time estimates provided by PDI for the delivery of CoalSwitch® fuel from the Ashland Facility.
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